Thirteen mortgage servicers have begun cutting checks, as part of the $3.6 billion settlement deal reached after the Office of the Comptroller of the Currency scrapped independent reviews to rectify a host of foreclosure wrongs.
Our Miami foreclosure lawyers understand that the checks will range from $300 to $125,000, and will be based on the type of abuse committed against the borrower.
So for example, someone who applied for a loan modification and never received a response may expect to get between $400 and $800.
Meanwhile, those who had their homes repossessed, despite the fact that they weren’t in default, could stand to receive the full $125,000.
In all, some 4.2 million borrowers are eligible to receive a payment, while federal regulators have estimated that only 1,135 will be receiving that $125,000 payment. Of those, the vast majority were homeowners whose homes were seized in a foreclosure, despite the fact that they were eligible for the Servicemembers Relief Act. This is the law that protects active military members from being subject to a foreclosure action while serving oversees.
These were the most egregious of cases, but most borrowers ended up suffering some kind of financial damage throughout the process. In a lot of cases, mortgage servicers tacked on fees that were unfair or simply refused to modify mortgages to terms that were more affordable – despite the fact that the whole reason that so many people were underwater on these properties in the first place was because banks failed to properly weigh the risks — and instead handed out sky-high mortgage loans to anyone with a pulse.
Then, when the housing market crashed, the mortgage servicers frequently used fraudulent paperwork to begin seizing those homes en masse.
Borrowers will be eligible for the money if they were at any stage of the foreclosure process back in either 2009 or 2010 and their mortgage was serviced by one of the following:
- Bank of America;
- Goldman Sachs;
- JPMorgan Chase;
- Morgan Stanley;
- MetLife Bank;
- U.S. Bank;
- Wells Fargo;
In Florida, hundreds of thousands of homeowners will be receiving money, with about 50,000 of those in Palm Beach County and even more in Miami-Dade and Broward. South Florida was the epicenter of the housing crisis.
It’s important for people to know that your receipt or cashing of a check does not disqualify you from still taking legal action against the mortgage servicer or bank or any other entity in the event you were wrongfully foreclosed upon during that time. No one should ask you to sign any waiver against further action. If that happens, you should contact an experienced foreclosure lawyer immediately.
It’s also worth noting that those borrowers who had requested a review under the “independent” foreclosure review process that was later abandoned can probably expect to be paid twice. That will apply to about 440,000 of that 4.1 million, which are those who actually applied for a review.
The settlement won’t cover foreclosures involving any other mortgage servicers except the ones listed, though other servicing firms are in the process of hammering out a separate settlement agreement with federal regulators.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
Payments coming for borrowers in $3.6B foreclosure settlement, April 10, 2013, By Les Christie, CNN Money
More Blog Entries:
Miami Foreclosure Lawyer Bruce Jacobs on SB 1666, April 13, 2013, Miami Foreclosure Lawyer Blog